Renaissance Healthcare Systems, Inc.

Client

Headquartered in Houston, Texas with revenue of approximately $100 million, Renaissance Healthcare Systems, Inc. and its subsidiaries (the “Company” or “Debtors”) owned or operated five general acute care hospitals in Texas. The Company had a complex capital structure involving three separate secured lending arrangements and over one hundred separate equipment leases.

Challenge

From late 2007 through mid-2008, the Company endeavored to complete a major renovation of its Grand Prairie, TX hospital (the “GP Project”). From inception, the GP Project was underfunded and experienced significant cost overruns. As a result of inadequate project financing, all available cash flow and liquidity from the Company’s other hospitals were diverted to the GP Project. During this time, the Company experienced decreased cash flow from its operating hospitals due to unfavorable managed care payment rates. By mid-2008, trade vendors were demanding COD terms and the Company had defaulted on all of its secured debt obligations. After exhausting its liquidity and left with no options, the Company filed for Bankruptcy protection in August 2008 in Ft. Worth, Texas.

Solution

Bridge was retained post-petition by the Debtors as its Restructuring Consultant and a Bridge Managing Director was appointed Chief Restructuring Officer (“CRO”). The Bridge team assisted the Debtors and its bankruptcy counsel with all aspects of the restructuring, including cash flow forecasting, negotiating three different DIP financing agreements, preparing the SOFA / SOAL and MORs, resolving numerous equipment leases, marketing the Debtors’ assets and ultimately executing successful sales of all of the Debtors’ operations – the largest of which involved a related party which required significant evaluation and courtroom testimony from the CRO.

Results

In spite of the numerous operational challenges faced during the bankruptcy, including instances of temporary hospital closure / curtailment due to Hurricane Ike and post-petition liquidity challenges, the Debtors successfully completed a going-concern sale of substantially all of its assets, and is currently in the process of undertaking a Chapter 11 liquidating plan. The matter is ongoing.